Bolivia has a long, rich history -- from its time as part of
the Inca Empire through its Spanish colonization to its fight for independence.
But the landlocked South American country’s last few decades are what really
interest Brent Kaup. In that short time, the country went from being a testing ground for free-market ideology to a place pursuing radical alternatives.

Kaup, an assistant professor of sociology at William &
Mary, has spent the last 10 years studying the country and recently published a
book, Market Justice: Political Economic
Struggle in Bolivia, about the country’s shift from neoliberal to
counter-neoliberal policies and the groups that have influenced those changes.

“It’s not only a testing ground of free market ideology,
it’s a testing ground of people pushing back against it in an attempt to seek
out potential alternatives,” said Kaup.

From solution to
source of discontent

A term somewhat unfamiliar to people in the global north,
neoliberalism is an extension and intensification of free market forms of rule,
said Kaup.

“It entails the privatization and commodification of goods
that were previously insulated from market mechanisms, things like water
provision, or things like oil and natural gas,” he said. “So neoliberalism or
neoliberalization is the process of turning these things into goods that are
more easily bought and sold in the global marketplace.”

Neoliberalism was introduced in Bolivia in the 1980s when
the country faced a hyperinflation crisis. Proponents of neoliberal ideology
were able to assume power and, in the process of solving the hyperinflation
crisis, introduced an array of policies promoting free market ideology, said
Kaup. These policies included the elimination of the national minimum wage and
the privatization of strategic sectors, including the mineral sector in the
1980s and the oil and natural gas sector in the 1990s.

“How did this affect the people in Bolivia? For most people,
it had quite deleterious consequences,” said Kaup.

Many people in the hydrocarbon sector lost their jobs due to
downsizing, and people who used to sell their agricultural goods in local
markets could no longer compete with the low prices that larger companies were
able to offer. As a result, agricultural workers began moving to the cities to
seek work, and many miners moved back to agricultural communities where their
families lived. Both groups also began to seek income through illegal means,
including the growing of coca or cocaine. Now facing common problems and living
in close proximity, the two groups of workers began joining together in ways
they had not before, coming together as one to face a common enemy:
neoliberalism. At the same time, a conflict arose between the mining and
agricultural elite, leaving a power vacuum for the masses to fill.

The backlash to neoliberalism reached new heights in the
late 1990s and early 2000s with what became known as the “water war.” The
International Monetary Fund and World Bank recommended that Bolivia privatize
the water supply in its largest cities. The country did, and it led to a
substantial increase in the price of water.

“So, what we saw was that some of the most disadvantaged
segments of Bolivian society were paying up to 25 percent of their monthly income
just to have access to clean water,” said Kaup. “This creates a situation that
is ripe for revolt, or that is undesirable for many people, particularly given
the high levels of inequality prevalent in Bolivia.”

About five years later, things once again came to a head
with the “gas war,” which came about in response to a plan to export Bolivia’s
natural gas to the United States through Chile The Bolivian masses discovered
that transnational corporations were making millions off of their natural gas
while they were getting very little from it. That fact, combined with the
Bolivian’s standing distaste for Chile and the United States, propelled the counter-neoliberalism
movement forward, said Kaup.

The masses called for the nationalization of the hydrocarbon
sector and finally, in 2003, forced the president of Bolivia to resign. His
vice president took over for a few years before he, too, was forced out of
office. A national election was held, and Evo Morales was elected, becoming the
first indigenous Bolivian to hold the post in decades. On May 1, 2006, the new
president nationalized Bolivia’s oil and natural gas sector.

“Now, the nationalization takes somewhat of a peculiar
form,” said Kaup. “When we think of nationalization, we think okay the state’s
going to come in and just take all of these people’s assets and not remunerate
them and that’s it. But what the Morales administration does is say that we
still want investors to invest here and we have financial constraints that we
have to deal with, so all that we want to do is become majority shareholders in
the oil and natural gas in our country.”

The Bolivian government also reintroduced royalty fees and
increased inflation rates for hydrocarbons. That combined with becoming
majority shareholders allowed the Bolivian state to take in a substantial
amount of money in a short period, said Kaup. The money was used to reinvest in
the industry, but it also funded a number of social programs, including an
old-age pension program, a program to keep children in school and a pre- and
post-natal care program to reduce infant mortality.

Post-neoliberal
paradox

With the Bolivian state and transnational corporations both
benefitting from the nationalization of the hydrocarbon sector, a surprising paradox
arose. Resistance to neoliberalism did not equal resistance to transnational
corporations.

“We usually think that when a nationalization occurs and a
self-proclaimed socialist becomes president, all investment would flee and go
elsewhere. But what’s happened is there’s been this tacit, unacknowledged sort
of alliance between the Morales government – as the representative of the
popular classes – and the transnational corporations,” said Kaup. “While the
transnational corporations did have their royalties and taxes more than
doubled, they still are making money, so now we have both the transnational
corporations making money and the Bolivian state making money, and they have
been able to mutually benefit.”

Although Bolivia serves as an interesting case study, Kaup said
that it should not be seen as a model for other countries.

“I’m always hesitant to say that there’s a Bolivian model,
and that’s probably for two reasons: We don’t know the long-term success or
failure of Bolivia in this process. … and to say that there is ‘a’ model is not
what the Bolivians would want … It may work for them, but it may not work for
someone else. There isn’t one model of development; there are many models of
development.”

However, people may still learn from the Bolivian case, said
Kaup.

“We could say the Bolivians have somewhat shown a way where
they have challenged traditionally powerful actors and have rearranged the
benefits coming from their resources to benefit the masses,” he said. “So if
other people are trying to say that, ‘Oh, could that work for us? Can we
somehow glean more from the riches beneath our feet?,’ the Bolivians have shown
that yes, you can do that.

“Whether or not they offer a model to do that is
debatable, but they do show that it’s possible, and I think that other places
can perhaps learn from that, as well.”